German sportswear maker Puma on Wednesday gave 2023 operating profit outlook with midpoint below last year’s level, as it expects currency effects and higher freight and raw material costs to again weigh on profitability.
Rising materials and freight costs as well as stronger US dollar, inventory markdowns and higher promotion expenses have put pressure on margins in the sporting goods sector.
The company sees operating profit (EBIT) in a range of US$626 million to $711 million this year, with currency-adjusted sales growth in a high-single-digit percentage rate.
It reported EBIT of 641 million euros for 2022, up from 557 million a year earlier but slightly below the 684.9 million expected by analysts, according to Refinitiv Eikon data.
Puma had guided for 2022 EBIT in a range of 600 million to 700 million euros.
Gross profit margin decreased by 420 basis points to 44.0 per cent in the fourth quarter, the company said, citing an industry-wide increase in promotional activity on the back of high inventory levels in the market.
Puma’s shares fell 2.6 per cent in early Frankfurt trade.
- Reporting by Linda Pasquini and Ozan Ergenay in Gdansk, additional reporting by Alexander Hübner; Editing by Milla Nissi, of Reuters.